Newell Brands Announces Second Quarter 2020 Results
Top Line Trends Improve Sequentially Throughout the Quarter
Delivers Strong Operating Cash Flow
Strengthens Short Term Liquidity
"We are encouraged by the current trends of our business, including top line improvement throughout the quarter, very strong consumption patterns in a number of our categories, and the progress we are making against key tenets of our turnaround plan, despite the challenging operating and economic environment caused by the global coronavirus pandemic,” said
Second Quarter 2020 Executive Summary
– Net sales were
– Core sales declined 12.6 percent compared with the prior year period. Three of eight business units delivered core sales growth.
– Reported operating margin was 7.7 percent compared with 9.3 percent in the prior year period. Normalized operating margin was 10.2 percent compared with 12.2 percent in the prior year period.
– Reported diluted earnings per share were
– Normalized diluted earnings per share were
– Year to date operating cash flow was
– The company raised
– The company initiated a restructuring program to streamline business operations and reduce overhead costs.
– Beginning in the second quarter of 2020, the company realigned its management and segment reporting as a result of changes in its organizational structure. The company now reports financial information in five operating segments: Appliances & Cookware, Commercial Solutions, Home Solutions, Learning & Development and
Second Quarter 2020 Operating Results
Net sales were
Reported gross margin was 31.5 percent compared with 34.9 percent in the prior year period, as fixed cost deleveraging, unfavorable mix and headwinds from currency and inflation more than offset the benefit from productivity. Normalized gross margin was 31.6 percent compared with 34.9 percent in the prior year period.
Reported operating income was
Interest expense was
The company reported tax expense of
The company reported net income of
Normalized net income was
An explanation of non-GAAP measures and a reconciliation of these non-GAAP results to comparable GAAP measures are included in the tables attached to this release.
Balance Sheet and Cash Flow
The company generated year to date operating cash flow of
In May, the company issued
New Reporting Segments
In connection with changes in its organizational structure, the company has realigned its management and segment reporting beginning in the second quarter of 2020. The company currently operates and reports financial and operating information in the following five segments:
Segment | Business Units | ||||||
Appliances & Cookware | Appliances & Cookware | ||||||
Commercial Solutions | Commercial, Connected Home & Security | ||||||
Home Solutions | Home Fragrance, Food | ||||||
Learning & Development | Writing, Baby | ||||||
Second Quarter 2020 Operating Segment Results
The Appliances & Cookware segment generated net sales of
The Commercial Solutions segment generated net sales of
The Home Solutions segment generated net sales of
The Learning & Development segment generated net sales of
COVID-19 Update
During the second quarter of 2020,
- Supply chain. In the first half of the second quarter, the company experienced significant supply chain disruption. Of its 135 manufacturing and distribution facilities, nearly 20 were temporarily closed, the most significant of which were its
South Deerfield, MA , Home Fragrance plant, itsMexicali, Mexico , Writing facility, and itsJuarez, Mexico , Connected Home & Security facility, which were temporarily shut down in line with government guidelines. Since that time, virtually all manufacturing and distribution facilities have re-opened, although the company continues to work to build inventory to replace lost production during the period of downtime. - Retail. While
Newell Brands’ largest retail customers remained open and in fact experienced a surge in sales, a number of secondary customers, primarily in the specialty and department store channels, temporarily closed their brick and mortar stores toward the end of the first quarter. These dynamics, in combination with some retailers’ prioritization of essential items in the early days of the pandemic, had a meaningful negative impact on retailer order patterns. In addition,Newell Brands temporarily closed itsYankee Candle retail stores inNorth America in mid-March. As the national and global economy began to re-open in the latter part of the second quarter, customer order patterns began to return to a more normal cadence, with the impacted retailers slowly reopening doors. - Consumer demand patterns. Over the course of the second quarter consumer demand patterns accelerated for the organization as a whole, with higher sell-through at
U.S. retail customers on a year over year basis, driven by strong consumer demand in the Food, Commercial and Appliances & Cookware businesses, and more recently theOutdoor & Recreation business. These trends have continued into July.
The ultimate impact of COVID-19 on the third quarter and full year 2020 is unknown at this time, as it is difficult to predict the trajectory and pace of the virus, the duration of social distancing and shelter-in-place mandates, the timing of school and office re-openings, and the timing and extent of economic recovery. The company continues to expect that it will deliver sequentially improved financial results in the back half of the year. Due to the uncertain and highly dynamic outlook for the global economy, however, the company is not issuing guidance for the third quarter or full year 2020.
In the early days of the pandemic,
During the second quarter the company launched a restructuring program to streamline business operations and reduce overhead costs. The company recorded
Executive Appointment
Conference Call
Newell Brands’ second quarter 2020 earnings conference call will be held today,
Non-GAAP Financial Measures
This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the
The company uses certain non-GAAP financial measures that are included in this press release and the additional financial information both to explain its results to stockholders and the investment community and in the internal evaluation and management of its businesses. The company’s management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures (a) permit investors to view the company’s performance and liquidity using the same tools that management uses to evaluate the company’s past performance, reportable business segments, prospects for future performance and liquidity, and (b) determine certain elements of management incentive compensation.
The company’s management believes that core sales provides a more complete understanding of underlying sales trends by providing sales on a consistent basis as it excludes the impacts of acquisitions, planned and completed divestitures, retail store openings and closings, certain market exits, and changes in foreign exchange from year-over-year comparisons. The effect of changes in foreign exchange on reported sales is calculated by applying the prior year average monthly exchange rates to the current year local currency sales amounts (excluding acquisitions and divestitures), with the difference between the 2020 reported sales and constant currency sales presented as the foreign exchange impact increase or decrease in core sales. The company’s management believes that “normalized” gross margin, “normalized” operating income, “normalized” operating margin, “normalized” net income, “normalized” diluted earnings per share, “normalized” interest and “normalized” tax benefits, which exclude restructuring and restructuring-related expenses and one-time and other events such as costs related to the extinguishment of debt, certain tax benefits and charges, impairment charges, pension settlement charges, divestiture costs, costs related to the acquisition, integration and financing of acquired businesses, amortization of acquisition-related intangible assets, inflationary adjustments, expenses related to certain product recalls and certain other items, are useful because they provide investors with a meaningful perspective on the current underlying performance of the company’s core ongoing operations and liquidity. On a pro forma basis, "normalized" items give effect to the company's decision not to sell the Commercial, Mapa and Quickie businesses.
The company determines the tax effect of the items excluded from normalized diluted earnings per share by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the company utilizes a “with” and “without” approach to determine normalized income tax benefit or expense. The company will also exclude one-time tax expenses related to a change in tax status of certain entities and the loss of GILTI tax credits as a result of utilizing the 50% IRC Section 163(j) limit resulting from the CARES Act to determine normalized income tax benefit.
While the company believes these non-GAAP financial measures are useful in evaluating the company’s performance and liquidity, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.
About
This press release and additional information about
Caution Concerning Forward-Looking Statements
Some of the statements in this press release and its exhibits, particularly those anticipating future financial performance, business prospects, growth, operating strategies, the impact of the COVID-19 pandemic and similar matters, are forward-looking statements within the meaning of the
- our ability to manage the demand, supply and operational challenges with the actual or perceived effects of the COVID-19 pandemic;
- our dependence on the strength of retail, commercial and industrial sectors of the economy in various countries around the world;
- competition with other manufacturers and distributors of consumer products;
- major retailers’ strong bargaining power and consolidation of our customers;
- risks related to our substantial indebtedness, a potential increase in interest rates or changes in our credit ratings;
- our ability to improve productivity, reduce complexity and streamline operations;
- future events that could adversely affect the value of our assets and/or stock price and require additional impairment charges;
- our ability to remediate the material weakness in internal control over financial reporting and to consistently maintain effective internal control over financial reporting;
- our ability to develop innovative new products, to develop, maintain and strengthen end-user brands and to realize the benefits of increased advertising and promotion spend;
- the impact of costs associated with divestitures;
- our ability to effectively execute our turnaround plan;
- changes in the prices of raw materials and sourced products and our ability to obtain raw materials and sourced products in a timely manner;
- the impact of governmental investigations, inspections, lawsuits, legislative requests or other actions by third parties;
- the risks inherent to our foreign operations, including foreign exchange fluctuations, exchange controls and pricing restrictions;
- a failure of one of our key information technology systems, networks, processes or related controls or those of our service providers;
- the impact of
U.S. and foreign regulations on our operations, including the escalation of tariffs on imports into theU.S. and exports toCanada ,China and theEuropean Union , environmental remediation costs and data privacy regulations; - the potential inability to attract, retain and motivate key employees;
- the impact of new
Treasury and tax regulations and the resolution of tax contingencies resulting in additional tax liabilities; - product liability, product recalls or related regulatory actions;
- our ability to protect intellectual property rights;
- significant increases in funding obligations related to our pension plans; and
- other factors listed from time to time in our filings with the
Securities and Exchange Commission , including, but not limited to, our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.
The consolidated condensed financial statements are prepared in conformity with accounting principles generally accepted in
The information contained in this press release and the tables is as of the date indicated. The company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Amounts in millions, except per share data) |
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
|
% Change |
||||||||
Net sales |
$ |
2,111 |
|
|
$ |
2,480 |
|
|
(14.9)% |
|
$ |
3,997 |
|
|
$ |
4,522 |
|
|
(11.6)% |
Cost of products sold |
1,447 |
|
|
1,615 |
|
|
|
|
2,716 |
|
|
3,002 |
|
|
|
||||
Gross profit |
664 |
|
|
865 |
|
|
(23.2)% |
|
1,281 |
|
|
1,520 |
|
|
(15.7)% |
||||
Selling, general and administrative expenses |
488 |
|
|
612 |
|
|
(20.3)% |
|
1,036 |
|
|
1,181 |
|
|
(12.3)% |
||||
Restructuring costs, net |
8 |
|
|
8 |
|
|
|
|
10 |
|
|
19 |
|
|
|
||||
Impairment of goodwill, intangibles and other assets |
5 |
|
|
14 |
|
|
|
|
1,480 |
|
|
77 |
|
|
|
||||
Operating income (loss) |
163 |
|
|
231 |
|
|
(29.4)% |
|
(1,245) |
|
|
243 |
|
|
NM |
||||
Non-operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
71 |
|
|
78 |
|
|
|
|
134 |
|
|
158 |
|
|
|
||||
Other (income) expense, net |
(1) |
|
|
— |
|
|
|
|
11 |
|
|
26 |
|
|
|
||||
Income (loss) before income taxes |
93 |
|
|
153 |
|
|
(39.2)% |
|
(1,390) |
|
|
59 |
|
|
NM |
||||
Income tax provision (benefit) |
15 |
|
|
30 |
|
|
|
|
(189) |
|
|
10 |
|
|
|
||||
Income (loss) from continuing operations |
78 |
|
|
123 |
|
|
(36.6)% |
|
(1,201) |
|
|
49 |
|
|
NM |
||||
Loss from discontinued operations, net of tax |
— |
|
|
(33) |
|
|
|
|
— |
|
|
(110) |
|
|
|
||||
Net income (loss) |
$ |
78 |
|
|
$ |
90 |
|
|
(13.3)% |
|
$ |
(1,201) |
|
|
$ |
(61) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic |
424.2 |
|
|
423.3 |
|
|
|
|
424.0 |
|
|
423.3 |
|
|
|
||||
Diluted |
424.7 |
|
|
423.5 |
|
|
|
|
424.0 |
|
|
423.6 |
|
|
|
||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
$ |
0.18 |
|
|
$ |
0.29 |
|
|
|
|
$ |
(2.83) |
|
|
$ |
0.12 |
|
|
|
Income (loss) from discontinued operations |
— |
|
|
(0.08) |
|
|
|
|
— |
|
|
(0.26) |
|
|
|
||||
Net income (loss) |
$ |
0.18 |
|
|
$ |
0.21 |
|
|
(14.3)% |
|
$ |
(2.83) |
|
|
$ |
(0.14) |
|
|
NM |
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations |
$ |
0.18 |
|
|
$ |
0.29 |
|
|
|
|
$ |
(2.83) |
|
|
$ |
0.12 |
|
|
|
Income (loss) from discontinued operations |
— |
|
|
(0.08) |
|
|
|
|
— |
|
|
(0.26) |
|
|
|
||||
Net income (loss) |
$ |
0.18 |
|
|
$ |
0.21 |
|
|
(14.3)% |
|
$ |
(2.83) |
|
|
$ |
(0.14) |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per share |
$ |
0.23 |
|
|
$ |
0.23 |
|
|
|
|
$ |
0.46 |
|
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
* NM - NOT MEANINGFUL |
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Amounts in millions) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
619 |
|
|
$ |
349 |
|
Accounts receivable, net |
1,641 |
|
|
1,842 |
|
||
Inventories |
1,714 |
|
|
1,606 |
|
||
Prepaid expenses and other current assets |
312 |
|
|
313 |
|
||
Total current assets |
4,286 |
|
|
4,110 |
|
||
Property, plant and equipment, net |
1,118 |
|
|
1,155 |
|
||
Operating lease assets |
553 |
|
|
615 |
|
||
|
3,496 |
|
|
3,709 |
|
||
Other intangible assets, net |
3,561 |
|
|
4,916 |
|
||
Deferred income taxes |
860 |
|
|
776 |
|
||
Other assets |
383 |
|
|
361 |
|
||
TOTAL ASSETS |
$ |
14,257 |
|
|
$ |
15,642 |
|
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
1,157 |
|
|
$ |
1,102 |
|
Accrued compensation |
159 |
|
|
204 |
|
||
Other accrued liabilities |
1,199 |
|
|
1,340 |
|
||
Short-term debt and current portion of long-term debt |
402 |
|
|
332 |
|
||
Total current liabilities |
2,917 |
|
|
2,978 |
|
||
Long-term debt |
5,781 |
|
|
5,391 |
|
||
Deferred income taxes |
471 |
|
|
625 |
|
||
Operating lease liabilities |
494 |
|
|
541 |
|
||
Other noncurrent liabilities |
1,078 |
|
|
1,111 |
|
||
Total liabilities |
10,741 |
|
|
10,646 |
|
||
|
|
|
|
||||
Stockholders' equity |
|
|
|
||||
Total stockholders' equity attributable to parent |
3,492 |
|
|
4,963 |
|
||
Total stockholders' equity attributable to non-controlling interests |
24 |
|
|
33 |
|
||
Total stockholders' equity |
3,516 |
|
|
4,996 |
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
14,257 |
|
|
$ |
15,642 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Amounts in millions) |
|||||||
|
Six Months Ended |
||||||
|
2020 |
|
2019 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(1,201) |
|
|
$ |
(61) |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation and amortization |
176 |
|
|
174 |
|
||
Impairment of goodwill, intangibles and other assets |
1,480 |
|
|
189 |
|
||
Loss from sale of businesses, net |
— |
|
|
2 |
|
||
Deferred income taxes |
(249) |
|
|
(38) |
|
||
Stock based compensation expense |
18 |
|
|
20 |
|
||
Loss on change in fair value of investments |
1 |
|
|
18 |
|
||
Other, net |
— |
|
|
3 |
|
||
Changes in operating accounts excluding the effects of divestitures: |
|
|
|
||||
Accounts receivable |
138 |
|
|
75 |
|
||
Inventories |
(145) |
|
|
(295) |
|
||
Accounts payable |
71 |
|
|
41 |
|
||
Accrued liabilities and other |
(157) |
|
|
(137) |
|
||
Net cash provided by (used in) operating activities |
132 |
|
|
(9) |
|
||
Cash flows from investing activities: |
|
|
|
||||
Proceeds from sale of divested businesses |
— |
|
|
740 |
|
||
Capital expenditures |
(94) |
|
|
(115) |
|
||
Other investing activities, net |
6 |
|
|
(3) |
|
||
Net cash provided by (used in) investing activities |
(88) |
|
|
622 |
|
||
Cash flows from financing activities: |
|
|
|
||||
Net payments of short term debt |
(26) |
|
|
(10) |
|
||
Proceeds from issuance of debt, net of debt issuance costs |
493 |
|
|
— |
|
||
Payments on current portion of long-term debt |
— |
|
|
(268) |
|
||
Payments on long-term debt |
(18) |
|
|
(5) |
|
||
Loss on extinguishment of debt |
— |
|
|
(3) |
|
||
Cash dividends |
(197) |
|
|
(195) |
|
||
Equity compensation activity and other, net |
(13) |
|
|
(5) |
|
||
Net cash provided by (used in) financing activities |
239 |
|
|
(486) |
|
||
Exchange rate effect on cash, cash equivalents and restricted cash |
(20) |
|
|
2 |
|
||
Increase in cash, cash equivalents and restricted cash |
263 |
|
|
129 |
|
||
Cash, cash equivalents and restricted cash at beginning of period |
371 |
|
|
496 |
|
||
Cash, cash equivalents and restricted cash at end of period |
$ |
634 |
|
|
$ |
625 |
|
Supplemental disclosures: |
|
|
|
||||
Restricted cash at beginning of period |
$ |
22 |
|
|
$ |
— |
|
Restricted cash at end of period |
15 |
|
|
— |
|
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CERTAIN LINE ITEMS (Amounts in millions, except per share data) |
||||||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP |
||||||||||||
|
|
Measure |
|
and restructuring |
|
amortization and |
|
and |
|
Other |
|
Measure |
||||||||||||
|
|
Reported |
|
related costs |
|
impairment |
|
related costs |
|
items |
|
Normalized* |
||||||||||||
Net sales |
|
$ |
2,111 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,111 |
|
Cost of products sold |
|
1,447 |
|
|
(2) |
|
|
— |
|
|
— |
|
|
(2) |
|
|
1,443 |
|
||||||
Gross profit |
|
664 |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
668 |
|
||||||
|
|
31.5 |
% |
|
|
|
|
|
|
|
|
|
31.6 |
% |
||||||||||
Selling, general and administrative expenses |
|
488 |
|
|
(7) |
|
|
(24) |
|
|
(1) |
|
|
(3) |
|
|
453 |
|
||||||
|
|
23.1 |
% |
|
|
|
|
|
|
|
|
|
21.5 |
% |
||||||||||
Restructuring costs, net |
|
8 |
|
|
(8) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Impairment of goodwill, intangibles and other assets |
|
5 |
|
|
— |
|
|
(5) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Operating income |
|
163 |
|
|
17 |
|
|
29 |
|
|
1 |
|
|
5 |
|
|
215 |
|
||||||
|
|
7.7 |
% |
|
|
|
|
|
|
|
|
|
10.2 |
% |
||||||||||
Non-operating (income) expense |
|
70 |
|
|
1 |
|
|
— |
|
|
(1) |
|
|
2 |
|
|
72 |
|
||||||
Income before income taxes |
|
93 |
|
|
16 |
|
|
29 |
|
|
2 |
|
|
3 |
|
|
143 |
|
||||||
Income tax provision [5] |
|
15 |
|
|
— |
|
|
1 |
|
|
— |
|
|
— |
|
|
16 |
|
||||||
Net income |
|
$ |
78 |
|
|
$ |
16 |
|
|
$ |
28 |
|
|
$ |
2 |
|
|
$ |
3 |
|
|
$ |
127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per share ** |
|
$ |
0.18 |
|
|
$ |
0.04 |
|
|
$ |
0.07 |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
0.30 |
|
* Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
**Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 424.7 million shares for the three months ended |
Totals may not add due to rounding. |
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Gain of |
|
[5] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CERTAIN LINE ITEMS (Amounts in millions, except per share data) |
|||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP Measure |
|||||||||||||||||||
|
|
Measure |
|
and |
|
amortization |
|
and |
|
Other |
|
|
|
Proforma |
|
||||||||||||||||
|
|
Reported |
|
related costs |
|
impairment |
|
costs |
|
items |
|
Normalized* |
|
Adjustments |
Proforma |
||||||||||||||||
Net sales |
|
$ |
2,480 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,480 |
|
|
$ |
— |
|
$ |
2,480 |
|
Cost of products sold |
|
1,615 |
|
|
(3) |
|
|
— |
|
|
— |
|
|
(7) |
|
|
1,605 |
|
|
9 |
|
1,614 |
|
||||||||
Gross profit |
|
865 |
|
|
3 |
|
|
— |
|
|
— |
|
|
7 |
|
|
875 |
|
|
(9) |
|
866 |
|
||||||||
|
|
34.9 |
% |
|
|
|
|
|
|
|
|
|
35.3 |
% |
|
|
34.9 |
% |
|||||||||||||
Selling, general and administrative expenses |
|
612 |
|
|
(6) |
|
|
(32) |
|
|
(9) |
|
|
(3) |
|
|
562 |
|
|
1 |
|
563 |
|
||||||||
|
|
24.7 |
% |
|
|
|
|
|
|
|
|
|
22.7 |
% |
|
|
22.7 |
% |
|||||||||||||
Restructuring costs, net |
|
8 |
|
|
(8) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
||||||||
Impairment of goodwill, intangibles and other assets |
|
14 |
|
|
— |
|
|
(14) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
||||||||
Operating income (loss) |
|
231 |
|
|
17 |
|
|
46 |
|
|
9 |
|
|
10 |
|
|
313 |
|
|
(10) |
|
303 |
|
||||||||
|
|
9.3 |
% |
|
|
|
|
|
|
|
|
|
12.6 |
% |
|
|
12.2 |
% |
|||||||||||||
Non-operating expense |
|
78 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
78 |
|
|
— |
|
78 |
|
||||||||
Income (loss) before income taxes |
|
153 |
|
|
17 |
|
|
46 |
|
|
9 |
|
|
10 |
|
|
235 |
|
|
(10) |
|
225 |
|
||||||||
Income tax provision (benefit) [6] |
|
30 |
|
|
5 |
|
|
9 |
|
|
2 |
|
|
15 |
|
|
61 |
|
|
(2) |
|
59 |
|
||||||||
Income (loss) from continuing operations |
|
123 |
|
|
12 |
|
|
37 |
|
|
7 |
|
|
(5) |
|
|
174 |
|
|
(8) |
|
166 |
|
||||||||
Income (loss) from discontinued operations, net of tax |
|
(33) |
|
|
— |
|
|
— |
|
|
45 |
|
|
4 |
|
|
16 |
|
|
— |
|
16 |
|
||||||||
Net income (loss) |
|
$ |
90 |
|
|
$ |
12 |
|
|
$ |
37 |
|
|
$ |
52 |
|
|
$ |
(1) |
|
|
$ |
190 |
|
|
$ |
(8) |
|
$ |
182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per share ** |
|
$ |
0.21 |
|
|
$ |
0.03 |
|
|
$ |
0.09 |
|
|
$ |
0.12 |
|
|
$ |
— |
|
|
$ |
0.45 |
|
|
$ |
(0.02) |
|
$ |
0.43 |
* Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
**Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 423.5 million shares for the three months ended |
Totals may not add due to rounding. |
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Loss of |
|
[5] |
Depreciation and amortization expense related to the Commercial Business, Mapa and Quickie that would have been recorded had the businesses been continuously classified as held and used. | |
[6] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CERTAIN LINE ITEMS (Amounts in millions, except per share data) |
||||||||||||||||||||||||
|
|
Six Months Ended |
||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP |
||||||||||||
|
|
Measure |
|
and restructuring |
|
amortization and |
|
and |
|
Other |
|
Measure |
||||||||||||
|
|
Reported |
|
related costs |
|
impairment |
|
related costs |
|
items |
|
Normalized* |
||||||||||||
Net sales |
|
$ |
3,997 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,997 |
|
Cost of products sold |
|
2,716 |
|
|
(2) |
|
|
— |
|
|
— |
|
|
(4) |
|
|
2,710 |
|
||||||
Gross profit |
|
1,281 |
|
|
2 |
|
|
— |
|
|
— |
|
|
4 |
|
|
1,287 |
|
||||||
|
|
32.0 |
% |
|
|
|
|
|
|
|
|
|
32.2 |
% |
||||||||||
Selling, general and administrative expenses |
|
1,036 |
|
|
(11) |
|
|
(55) |
|
|
(2) |
|
|
(9) |
|
|
959 |
|
||||||
|
|
25.9 |
% |
|
|
|
|
|
|
|
|
|
24.0 |
% |
||||||||||
Restructuring costs, net |
|
10 |
|
|
(10) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Impairment of goodwill, intangibles and other assets |
|
1,480 |
|
|
— |
|
|
(1,480) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Operating income (loss) |
|
(1,245) |
|
|
23 |
|
|
1,535 |
|
|
2 |
|
|
13 |
|
|
328 |
|
||||||
|
|
(31.1) |
% |
|
|
|
|
|
|
|
|
|
8.2 |
% |
||||||||||
Non-operating (income) expense |
|
145 |
|
|
1 |
|
|
— |
|
|
— |
|
|
(3) |
|
|
143 |
|
||||||
Income (loss) before income taxes |
|
(1,390) |
|
|
22 |
|
|
1,535 |
|
|
2 |
|
|
16 |
|
|
185 |
|
||||||
Income tax provision (benefit) [5] |
|
(189) |
|
|
1 |
|
|
230 |
|
|
— |
|
|
(23) |
|
|
19 |
|
||||||
Net income (loss) |
|
$ |
(1,201) |
|
|
$ |
21 |
|
|
$ |
1,305 |
|
|
$ |
2 |
|
|
$ |
39 |
|
|
$ |
166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings (loss) per share ** |
|
$ |
(2.83) |
|
|
$ |
0.05 |
|
|
$ |
3.07 |
|
|
$ |
— |
|
|
$ |
0.09 |
|
|
$ |
0.39 |
|
* Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
**Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 424.8 million shares for the six months ended |
Totals may not add due to rounding. |
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Loss of |
|
[5] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CERTAIN LINE ITEMS (Amounts in millions, except per share data) |
|||||||||||||||||||||||||||||||
|
|
Six Months Ended |
|||||||||||||||||||||||||||||
|
|
GAAP |
|
Restructuring |
|
Acquisition |
|
Transactions |
|
|
|
Non-GAAP Measure |
|||||||||||||||||||
|
|
Measure |
|
and |
|
amortization |
|
and |
|
Other |
|
|
|
Proforma |
|
||||||||||||||||
|
|
Reported |
|
related costs |
|
impairment |
|
costs |
|
items |
|
Normalized* |
|
Adjustments |
Proforma |
||||||||||||||||
Net sales |
|
$ |
4,522 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,522 |
|
|
$ |
— |
|
$ |
4,522 |
|
Cost of products sold |
|
3,002 |
|
|
(4) |
|
|
— |
|
|
— |
|
|
(8) |
|
|
2,990 |
|
|
19 |
|
3,009 |
|
||||||||
Gross profit |
|
1,520 |
|
|
4 |
|
|
— |
|
|
— |
|
|
8 |
|
|
1,532 |
|
|
(19) |
|
1,513 |
|
||||||||
|
|
33.6 |
% |
|
|
|
|
|
|
|
|
|
33.9 |
% |
|
|
33.5 |
% |
|||||||||||||
Selling, general and administrative expenses |
|
1,181 |
|
|
(12) |
|
|
(65) |
|
|
(16) |
|
|
(4) |
|
|
1,084 |
|
|
2 |
|
1,086 |
|
||||||||
|
|
26.1 |
% |
|
|
|
|
|
|
|
|
|
24.0 |
% |
|
|
24.0 |
% |
|||||||||||||
Restructuring costs, net |
|
19 |
|
|
(19) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
||||||||
Impairment of goodwill, intangibles and other assets |
|
77 |
|
|
— |
|
|
(77) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
||||||||
Operating income (loss) |
|
243 |
|
|
35 |
|
|
142 |
|
|
16 |
|
|
12 |
|
|
448 |
|
|
(21) |
|
427 |
|
||||||||
|
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
9.9 |
% |
|
|
9.4 |
% |
|||||||||||||
Non-operating (income) expense |
|
184 |
|
|
— |
|
|
— |
|
|
— |
|
|
(21) |
|
|
163 |
|
|
— |
|
163 |
|
||||||||
Income (loss) before income taxes |
|
59 |
|
|
35 |
|
|
142 |
|
|
16 |
|
|
33 |
|
|
285 |
|
|
(21) |
|
264 |
|
||||||||
Income tax provision (benefit) [6] |
|
10 |
|
|
12 |
|
|
22 |
|
|
5 |
|
|
19 |
|
|
68 |
|
|
(5) |
|
63 |
|
||||||||
Income (loss) from continuing operations |
|
49 |
|
|
23 |
|
|
120 |
|
|
11 |
|
|
14 |
|
|
217 |
|
|
(16) |
|
201 |
|
||||||||
Income (loss) from discontinued operations, net of tax |
|
(110) |
|
|
— |
|
|
84 |
|
|
40 |
|
|
20 |
|
|
34 |
|
|
— |
|
34 |
|
||||||||
Net income (loss) |
|
$ |
(61) |
|
|
$ |
23 |
|
|
$ |
204 |
|
|
$ |
51 |
|
|
$ |
34 |
|
|
$ |
251 |
|
|
$ |
(16) |
|
$ |
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per share ** |
|
$ |
(0.14) |
|
|
$ |
0.05 |
|
|
$ |
0.48 |
|
|
$ |
0.12 |
|
|
$ |
0.08 |
|
|
$ |
0.59 |
|
|
$ |
(0.04) |
|
$ |
0.55 |
|
* Normalized results are financial measures that are not in accordance with GAAP and exclude the above normalized adjustments. See below for a discussion of each of these adjustments. |
**Adjustments and normalized earnings per share are calculated based on diluted weighted average shares of 423.6 million shares for the six months ended |
Totals may not add due to rounding. |
[1] |
Restructuring and restructuring related costs of |
|
[2] |
Acquisition amortization costs of |
|
[3] |
Divestiture costs of |
|
[4] |
Loss of |
|
[5] |
Depreciation and amortization expense related to the Commercial Business and the Mapa and Quickie businesses that would have been recorded had the businesses been continuously classified as held and used. | |
[6] |
The Company determined the tax effect of the items excluded from normalized results by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In certain situations in which an item excluded from normalized results impacts income tax expense, the Company uses a "with" and "without" approach to determine normalized income tax expense. |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
|||||||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Three Months Ended |
|
Year over year changes |
||||||||||||||||||||||||||||||||||||||||
|
Reported |
Reported |
|
Normalized |
Normalized |
|
|
Reported |
Reported |
|
Proforma |
Proforma |
|
|
|
|
Proforma |
||||||||||||||||||||||||||||
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
|
|
Operating Income |
|||||||||||||||||||||||||||||
|
Income (Loss) |
Margin |
Items [1] |
Income (Loss) |
Margin |
|
|
Income (Loss) |
Margin |
Items [2] [3] |
Income (Loss) [3] |
Margin [3] |
|
$ |
% |
|
$ |
% |
|||||||||||||||||||||||||||
APPLIANCES AND |
$ |
359 |
|
$ |
10 |
|
2.8 |
% |
$ |
3 |
|
$ |
13 |
|
3.6 |
% |
|
$ |
362 |
|
$ |
6 |
|
1.7 |
% |
$ |
3 |
|
$ |
9 |
|
2.5 |
% |
|
$ |
(3) |
|
(0.8) |
% |
|
$ |
4 |
|
44.4 |
% |
COMMERCIAL |
413 |
|
40 |
|
9.7 |
% |
5 |
|
45 |
|
10.9 |
% |
|
454 |
|
53 |
|
11.7 |
% |
7 |
|
60 |
|
13.2 |
% |
|
(41) |
|
(9.0) |
% |
|
(15) |
|
(25.0) |
% |
||||||||||
HOME SOLUTIONS |
355 |
|
29 |
|
8.2 |
% |
17 |
|
46 |
|
13.0 |
% |
|
372 |
|
4 |
|
1.1 |
% |
12 |
|
16 |
|
4.3 |
% |
|
(17) |
|
(4.6) |
% |
|
30 |
|
187.5 |
% |
||||||||||
LEARNING AND |
631 |
|
126 |
|
20.0 |
% |
3 |
|
129 |
|
20.4 |
% |
|
849 |
|
217 |
|
25.6 |
% |
4 |
|
221 |
|
26.0 |
% |
|
(218) |
|
(25.7) |
% |
|
(92) |
|
(41.6) |
% |
||||||||||
OUTDOOR AND |
353 |
|
25 |
|
7.1 |
% |
8 |
|
33 |
|
9.3 |
% |
|
443 |
|
40 |
|
9.0 |
% |
13 |
|
53 |
|
12.0 |
% |
|
(90) |
|
(20.3) |
% |
|
(20) |
|
(37.7) |
% |
||||||||||
CORPORATE |
— |
|
(59) |
|
— |
% |
8 |
|
(51) |
|
— |
% |
|
— |
|
(81) |
|
— |
% |
25 |
|
(56) |
|
— |
% |
|
— |
|
— |
% |
|
5 |
|
8.9 |
% |
||||||||||
RESTRUCTURING |
— |
|
(8) |
|
— |
% |
8 |
|
— |
|
— |
% |
|
— |
|
(8) |
|
— |
% |
8 |
|
— |
|
— |
% |
|
— |
|
— |
% |
|
— |
|
— |
% |
||||||||||
|
$ |
2,111 |
|
$ |
163 |
|
7.7 |
% |
$ |
52 |
|
$ |
215 |
|
10.2 |
% |
|
$ |
2,480 |
|
$ |
231 |
|
9.3 |
% |
$ |
72 |
|
$ |
303 |
|
12.2 |
% |
|
$ |
(369) |
|
(14.9) |
% |
|
$ |
(88) |
|
(29.0) |
% |
[1] |
The three months ended |
|
[2] |
The three months ended |
|
[3] |
Normalized proforma operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
|||||||||||||||||||||||||||||||||||||||||||||
|
Six Months Ended |
|
Six Months Ended |
|
Year over year changes |
||||||||||||||||||||||||||||||||||||||||
|
Reported |
Reported |
|
Normalized |
Normalized |
|
|
Reported |
Reported |
|
Proforma |
Proforma |
|
|
|
|
Proforma Operating |
||||||||||||||||||||||||||||
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
|
Operating |
Operating |
Excluded |
Operating |
Operating |
|
|
|
Income (Loss) |
|||||||||||||||||||||||||||||
|
Income (Loss) |
Margin |
Items [1] |
Income (Loss) |
Margin |
|
|
Income (Loss) |
Margin |
Items [2] [3] |
Income (Loss) [3] |
Margin [3] |
|
$ |
% |
|
$ |
% |
|||||||||||||||||||||||||||
APPLIANCES AND |
$ |
650 |
|
$ |
(298) |
|
(45.8) |
% |
$ |
304 |
|
$ |
6 |
|
0.9 |
% |
|
$ |
692 |
|
$ |
2 |
|
0.3 |
% |
$ |
5 |
|
$ |
7 |
|
1.0 |
% |
|
$ |
(42) |
|
(6.1) |
% |
|
$ |
(1) |
|
(14.3) |
% |
COMMERCIAL |
826 |
|
(232) |
|
(28.1) |
% |
328 |
|
96 |
|
11.6 |
% |
|
868 |
|
45 |
|
5.2 |
% |
64 |
|
109 |
|
12.6 |
% |
|
(42) |
|
(4.8) |
% |
|
(13) |
|
(11.9) |
% |
||||||||||
HOME SOLUTIONS |
702 |
|
(262) |
|
(37.3) |
% |
322 |
|
60 |
|
8.5 |
% |
|
743 |
|
(1) |
|
(0.1) |
% |
25 |
|
24 |
|
3.2 |
% |
|
(41) |
|
(5.5) |
% |
|
36 |
|
150.0 |
% |
||||||||||
LEARNING AND |
1,159 |
|
131 |
|
11.3 |
% |
84 |
|
215 |
|
18.6 |
% |
|
1,430 |
|
306 |
|
21.4 |
% |
9 |
|
315 |
|
22.0 |
% |
|
(271) |
|
(19.0) |
% |
|
(100) |
|
(31.7) |
% |
||||||||||
OUTDOOR AND |
660 |
|
(449) |
|
(68.0) |
% |
497 |
|
48 |
|
7.3 |
% |
|
789 |
|
52 |
|
6.6 |
% |
20 |
|
72 |
|
9.1 |
% |
|
(129) |
|
(16.3) |
% |
|
(24) |
|
(33.3) |
% |
||||||||||
CORPORATE |
— |
|
(125) |
|
— |
% |
28 |
|
(97) |
|
— |
% |
|
— |
|
(142) |
|
— |
% |
42 |
|
(100) |
|
— |
% |
|
— |
|
— |
% |
|
3 |
|
3.0 |
% |
||||||||||
RESTRUCTURING |
— |
|
(10) |
|
— |
% |
10 |
|
— |
|
— |
% |
|
— |
|
(19) |
|
— |
% |
19 |
|
— |
|
— |
% |
|
— |
|
— |
% |
|
— |
|
— |
% |
||||||||||
|
$ |
3,997 |
|
$ |
(1,245) |
|
(31.1) |
% |
$ |
1,573 |
|
$ |
328 |
|
8.2 |
% |
|
$ |
4,522 |
|
$ |
243 |
|
5.4 |
% |
$ |
184 |
|
$ |
427 |
|
9.4 |
% |
|
$ |
(525) |
|
(11.6) |
% |
|
$ |
(99) |
|
(23.2) |
% |
[1] |
The six months ended |
|
[2] |
The six months ended |
|
[3] |
Normalized proforma operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CORE SALES ANALYSIS BY SEGMENT (Amounts in millions) |
||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Three Months Ended |
|
Increase (Decrease) |
|||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
|
2019 |
Divestitures and Other, Net |
2019 |
|
$ |
|
% |
|||||||||||||||||||
APPLIANCES AND |
$ |
359 |
|
$ |
— |
|
$ |
359 |
|
$ |
25 |
|
$ |
384 |
|
|
$ |
362 |
|
$ |
— |
|
$ |
362 |
|
|
$ |
22 |
|
|
6.1 |
% |
COMMERCIAL |
413 |
|
— |
|
413 |
|
10 |
|
423 |
|
|
454 |
|
— |
|
454 |
|
|
(31) |
|
|
(6.8) |
% |
|||||||||
HOME SOLUTIONS |
355 |
|
— |
|
355 |
|
3 |
|
358 |
|
|
372 |
|
(7) |
|
365 |
|
|
(7) |
|
|
(1.9) |
% |
|||||||||
LEARNING AND |
631 |
|
(1) |
|
630 |
|
7 |
|
637 |
|
|
849 |
|
(16) |
|
833 |
|
|
(196) |
|
|
(23.5) |
% |
|||||||||
OUTDOOR AND |
353 |
|
1 |
|
354 |
|
4 |
|
358 |
|
|
443 |
|
13 |
|
456 |
|
|
(98) |
|
|
(21.5) |
% |
|||||||||
|
$ |
2,111 |
|
$ |
— |
|
$ |
2,111 |
|
$ |
49 |
|
$ |
2,160 |
|
|
$ |
2,480 |
|
$ |
(10) |
|
$ |
2,470 |
|
|
$ |
(310) |
|
|
(12.6) |
% |
CORE SALES ANALYSIS BY GEOGRAPHY |
||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Three Months Ended |
|
Increase (Decrease) |
|||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
|
2019 |
Divestitures and Other, Net |
2019 |
|
$ |
|
% |
|||||||||||||||||||
|
$ |
1,535 |
|
$ |
— |
|
$ |
1,535 |
|
$ |
3 |
|
$ |
1,538 |
|
|
$ |
1,768 |
|
$ |
(10) |
|
$ |
1,758 |
|
|
$ |
(220) |
|
|
(12.5) |
% |
|
299 |
|
— |
|
299 |
|
7 |
|
306 |
|
|
360 |
|
— |
|
360 |
|
|
(54) |
|
|
(15.0) |
% |
|||||||||
|
129 |
|
— |
|
129 |
|
37 |
|
166 |
|
|
166 |
|
— |
|
166 |
|
|
— |
|
|
— |
% |
|||||||||
|
148 |
|
— |
|
148 |
|
2 |
|
150 |
|
|
186 |
|
— |
|
186 |
|
|
(36) |
|
|
(19.4) |
% |
|||||||||
|
$ |
2,111 |
|
$ |
— |
|
$ |
2,111 |
|
$ |
49 |
|
$ |
2,160 |
|
|
$ |
2,480 |
|
$ |
(10) |
|
$ |
2,470 |
|
|
$ |
(310) |
|
|
(12.6) |
% |
[1] |
"Core Sales” provides a consistent basis for year-over-year comparisons in sales as it excludes the impacts of acquisitions, completed divestitures, retail store openings and closings, changes in foreign currency. | |
[2] |
Divestitures include the exit of the North American distributorship of Uniball® Products and, consistent with standard retail practice, current and prior period net sales from retail store closures. | |
[3] |
“Currency Impact” represents the effect of foreign currency on 2020 reported sales and is calculated as the difference between the 2020 reported sales and by applying the prior year average monthly exchange rates to the current year local currency sales amounts (excluding acquisitions and divestitures). |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) CORE SALES ANALYSIS BY SEGMENT (Amounts in millions) |
||||||||||||||||||||||||||||||||
|
Six Months Ended |
|
Six Months Ended |
|
Increase (Decrease) |
|||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
|
2019 |
Divestitures and Other, Net |
2019 |
|
$ |
|
% |
|||||||||||||||||||
APPLIANCES AND |
$ |
650 |
|
$ |
— |
|
$ |
650 |
|
$ |
36 |
|
$ |
686 |
|
|
$ |
692 |
|
$ |
— |
|
$ |
692 |
|
|
$ |
(6) |
|
|
(0.9) |
% |
COMMERCIAL |
826 |
|
— |
|
826 |
|
18 |
|
844 |
|
|
868 |
|
— |
|
868 |
|
|
(24) |
|
|
(2.8) |
% |
|||||||||
HOME SOLUTIONS |
702 |
|
(1) |
|
701 |
|
6 |
|
707 |
|
|
743 |
|
(13) |
|
730 |
|
|
(23) |
|
|
(3.2) |
% |
|||||||||
LEARNING AND |
1,159 |
|
(4) |
|
1,155 |
|
14 |
|
1,169 |
|
|
1,430 |
|
(34) |
|
1,396 |
|
|
(227) |
|
|
(16.3) |
% |
|||||||||
OUTDOOR AND |
660 |
|
1 |
|
661 |
|
8 |
|
669 |
|
|
789 |
|
13 |
|
802 |
|
|
(133) |
|
|
(16.6) |
% |
|||||||||
|
$ |
3,997 |
|
$ |
(4) |
|
$ |
3,993 |
|
$ |
82 |
|
$ |
4,075 |
|
|
$ |
4,522 |
|
$ |
(34) |
|
$ |
4,488 |
|
|
$ |
(413) |
|
|
(9.2) |
% |
CORE SALES ANALYSIS BY GEOGRAPHY |
||||||||||||||||||||||||||||||||
|
Six Months Ended |
|
Six Months Ended |
|
Increase (Decrease) |
|||||||||||||||||||||||||||
|
2020 |
Acquisitions, |
|
Currency Impact |
2020 |
|
2019 |
Divestitures and Other, Net |
2019 |
|
$ |
|
% |
|||||||||||||||||||
|
$ |
2,854 |
|
$ |
(4) |
|
$ |
2,850 |
|
$ |
4 |
|
$ |
2,854 |
|
|
$ |
3,176 |
|
$ |
(32) |
|
$ |
3,144 |
|
|
$ |
(290) |
|
|
(9.2) |
% |
|
600 |
|
— |
|
600 |
|
15 |
|
615 |
|
|
684 |
|
(1) |
|
683 |
|
|
(68) |
|
|
(10.0) |
% |
|||||||||
|
264 |
|
— |
|
264 |
|
58 |
|
322 |
|
|
312 |
|
(1) |
|
311 |
|
|
11 |
|
|
3.5 |
% |
|||||||||
|
279 |
|
— |
|
279 |
|
5 |
|
284 |
|
|
350 |
|
— |
|
350 |
|
|
(66) |
|
|
(18.9) |
% |
|||||||||
|
$ |
3,997 |
|
$ |
(4) |
|
$ |
3,993 |
|
$ |
82 |
|
$ |
4,075 |
|
|
$ |
4,522 |
|
$ |
(34) |
|
$ |
4,488 |
|
|
$ |
(413) |
|
|
(9.2) |
% |
[1] |
“Core Sales” provides a consistent basis for year-over-year comparisons in sales as it excludes the impacts of acquisitions, completed divestitures, retail store openings and closings, changes in foreign currency. |
|
[2] |
Divestitures include the exit of the North American distributorship of Uniball® Products and, consistent with standard retail practice, current and prior period net sales from retail store closures. |
|
[3] |
“Currency Impact” represents the effect of foreign currency on 2020 reported sales and is calculated as the difference between the 2020 reported sales and by applying the prior year average monthly exchange rates to the current year local currency sales amounts (excluding acquisitions and divestitures). |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
|||||||||||||||||||||
|
For the three months ended |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Normalized |
|
Normalized |
||||||||||
|
|
|
Reported |
|
Reported |
|
|
|
Proforma |
|
Proforma |
||||||||||
|
|
|
Operating Income |
|
Operating |
|
Excluded |
|
Operating Income |
|
Operating |
||||||||||
|
|
(Loss) |
|
Margin |
|
Items [1] [2] |
|
(Loss) |
|
Margin |
|||||||||||
|
|
|
|
|
|
|
|||||||||||||||
APPLIANCES AND COOKWARE |
$ |
330 |
|
$ |
(4 |
) |
(1.2 |
)% |
$ |
2 |
$ |
(2 |
) |
(0.6 |
)% |
||||||
COMMERCIAL SOLUTIONS |
414 |
|
(8 |
) |
(1.9 |
)% |
57 |
49 |
|
11.8 |
% |
||||||||||
HOME SOLUTIONS |
371 |
|
(5 |
) |
(1.3 |
)% |
13 |
8 |
|
2.2 |
% |
||||||||||
LEARNING AND DEVELOPMENT |
581 |
|
89 |
|
15.3 |
% |
5 |
94 |
|
16.2 |
% |
||||||||||
OUTDOOR AND RECREATION |
346 |
|
12 |
|
3.5 |
% |
7 |
19 |
|
5.5 |
% |
||||||||||
CORPORATE |
— |
|
(61 |
) |
— |
% |
17 |
(44 |
) |
— |
% |
||||||||||
RESTRUCTURING |
— |
|
(11 |
) |
— |
% |
11 |
— |
|
— |
% |
||||||||||
|
|
|
|
|
|
|
|||||||||||||||
|
$ |
2,042 |
|
$ |
12 |
|
0.6 |
% |
$ |
112 |
$ |
124 |
|
6.1 |
% |
1. |
Excluded items consist of |
|
2. |
Normalized proforma operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||||||
|
|
For the three months ended |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Normalized |
|
Normalized |
||||||||||||||
|
|
|
|
Reported |
|
Reported |
|
|
|
Proforma |
|
Proforma |
||||||||||||
|
|
|
|
Operating Income |
|
Operating |
|
Excluded |
|
Operating Income |
|
Operating |
||||||||||||
|
|
|
|
(Loss) |
|
Margin |
|
Items [3] [4] |
|
(Loss) |
|
Margin |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
APPLIANCES AND COOKWARE |
|
$ |
362 |
|
$ |
6 |
|
|
1.7 |
% |
$ |
3 |
|
$ |
9 |
|
|
2.5 |
% |
|||||
COMMERCIAL SOLUTIONS |
|
454 |
|
53 |
|
|
11.7 |
% |
7 |
|
60 |
|
|
13.2 |
% |
|||||||||
HOME SOLUTIONS |
|
372 |
|
4 |
|
|
1.1 |
% |
12 |
|
16 |
|
|
4.3 |
% |
|||||||||
LEARNING AND DEVELOPMENT |
|
849 |
|
217 |
|
|
25.6 |
% |
4 |
|
221 |
|
|
26.0 |
% |
|||||||||
OUTDOOR AND RECREATION |
|
443 |
|
40 |
|
|
9.0 |
% |
13 |
|
53 |
|
|
12.0 |
% |
|||||||||
CORPORATE |
|
— |
|
(81 |
) |
|
— |
% |
25 |
|
(56 |
) |
|
— |
% |
|||||||||
RESTRUCTURING |
|
— |
|
(8 |
) |
|
— |
% |
8 |
|
— |
|
|
— |
% |
|||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
$ |
2,480 |
|
$ |
231 |
|
|
9.3 |
% |
$ |
72 |
|
$ |
303 |
|
|
12.2 |
% |
3. |
Excluded items consist of |
|
4. |
Normalized proforma operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||||||
|
|
For the three months ended |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Normalized |
|
Normalized |
||||||||||||||
|
|
|
|
Reported |
|
Reported |
|
|
|
Proforma |
|
Proforma |
||||||||||||
|
|
|
|
Operating Income |
|
Operating |
|
Excluded |
|
Operating Income |
|
Operating |
||||||||||||
|
|
|
|
(Loss) |
|
Margin |
|
Items [5] [6] |
|
(Loss) |
|
Margin |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
APPLIANCES AND COOKWARE |
|
430 |
|
(595 |
) |
|
(138.4 |
)% |
613 |
|
18 |
|
|
4.2 |
% |
|||||||||
COMMERCIAL SOLUTIONS |
|
475 |
|
(216 |
) |
|
(45.5 |
)% |
285 |
|
69 |
|
|
14.5 |
% |
|||||||||
HOME SOLUTIONS |
|
484 |
|
(112 |
) |
|
(23.1 |
)% |
172 |
|
60 |
|
|
12.4 |
% |
|||||||||
LEARNING AND DEVELOPMENT |
|
824 |
|
182 |
|
|
22.1 |
% |
8 |
|
190 |
|
|
23.1 |
% |
|||||||||
OUTDOOR AND RECREATION |
|
356 |
|
(41 |
) |
|
(11.5 |
)% |
78 |
|
37 |
|
|
10.4 |
% |
|||||||||
CORPORATE |
|
— |
|
(72 |
) |
|
— |
% |
25 |
|
(47 |
) |
|
— |
% |
|||||||||
RESTRUCTURING |
|
— |
|
(3 |
) |
|
— |
% |
3 |
|
— |
|
|
— |
% |
|||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
$ |
2,569 |
|
$ |
(857 |
) |
|
(33.4 |
)% |
$ |
1,184 |
|
$ |
327 |
|
|
12.7 |
% |
|||||
5. |
|
Excluded items consist of |
6. |
|
Normalized proforma operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
|||||||||||||||||||||
|
|
For the three months ended |
|||||||||||||||||||
|
|
|
|
Reported |
|
Reported |
|
|
|
Normalized |
|
Normalized |
|||||||||
|
|
|
|
Operating Income |
|
Operating |
|
Excluded |
|
Operating Income |
|
Operating |
|||||||||
|
|
|
|
(Loss) |
|
Margin |
|
Items [7] |
|
(Loss) |
|
Margin |
|||||||||
|
|
|
|
|
|
|
|
||||||||||||||
APPLIANCES AND COOKWARE |
|
570 |
|
58 |
|
|
10.2 |
% |
(4 |
) |
|
54 |
|
|
9.5 |
% |
|||||
COMMERCIAL SOLUTIONS |
|
436 |
|
35 |
|
|
8.0 |
% |
16 |
|
|
51 |
|
|
11.7 |
% |
|||||
HOME SOLUTIONS |
|
648 |
|
96 |
|
|
14.8 |
% |
16 |
|
|
112 |
|
|
17.3 |
% |
|||||
LEARNING AND DEVELOPMENT |
|
702 |
|
99 |
|
|
14.1 |
% |
29 |
|
|
128 |
|
|
18.2 |
% |
|||||
OUTDOOR AND RECREATION |
|
268 |
|
(74 |
) |
|
(27.6 |
)% |
72 |
|
|
(2 |
) |
|
(0.7 |
)% |
|||||
CORPORATE |
|
— |
|
(77 |
) |
|
— |
% |
29 |
|
|
(48 |
) |
|
— |
% |
|||||
RESTRUCTURING |
|
— |
|
(5 |
) |
|
— |
% |
5 |
|
|
— |
|
|
— |
% |
|||||
|
|
|
|
|
|
|
|
||||||||||||||
|
|
2,624 |
|
132 |
|
|
5.0 |
% |
163 |
|
|
295 |
|
|
11.2 |
% |
7. |
Excluded items consist of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||||||
|
|
For the twelve months ended |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
Normalized |
|
Normalized |
||||||||||||||
|
|
|
|
Reported |
|
Reported |
|
|
|
Proforma |
|
Proforma |
||||||||||||
|
|
|
|
Operating Income |
|
Operating |
|
Excluded |
|
Operating Income |
|
Operating |
||||||||||||
|
|
|
|
(Loss) |
|
Margin |
|
Items [8] [9] |
|
(Loss) |
|
Margin |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
APPLIANCES AND COOKWARE |
|
1,692 |
|
(535 |
) |
|
(31.6 |
)% |
614 |
|
79 |
|
|
4.7 |
% |
|||||||||
COMMERCIAL SOLUTIONS |
|
1,779 |
|
(136 |
) |
|
(7.6 |
)% |
365 |
|
229 |
|
|
12.9 |
% |
|||||||||
HOME SOLUTIONS |
|
1,875 |
|
(17 |
) |
|
(0.9 |
)% |
213 |
|
196 |
|
|
10.5 |
% |
|||||||||
LEARNING AND DEVELOPMENT |
|
2,956 |
|
587 |
|
|
19.9 |
% |
46 |
|
633 |
|
|
21.4 |
% |
|||||||||
OUTDOOR AND RECREATION |
|
1,413 |
|
(63 |
) |
|
(4.5 |
)% |
170 |
|
107 |
|
|
7.6 |
% |
|||||||||
CORPORATE |
|
— |
|
(291 |
) |
|
— |
% |
96 |
|
(195 |
) |
|
— |
% |
|||||||||
RESTRUCTURING |
|
— |
|
(27 |
) |
|
— |
% |
27 |
|
— |
|
|
— |
% |
|||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
$ |
9,715 |
|
$ |
(482 |
) |
|
(5.0 |
)% |
$ |
1,531 |
|
$ |
1,049 |
|
|
10.8 |
% |
|||||
8. |
Excluded items consist of |
|
9. |
Normalized proforma operating income (loss) and margin reflect an adjustment within excluded items for depreciation and amortization expense of |
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION (UNAUDITED) FINANCIAL WORKSHEET - SEGMENT REPORTING (Amounts in millions) |
||||||||||||||||||||||
|
|
For the three months ended |
||||||||||||||||||||
|
|
|
Reported |
|
Reported |
|
|
Normalized |
|
Normalized |
||||||||||||
|
|
|
Operating Income |
|
Operating |
|
Excluded |
Operating Income |
|
Operating |
||||||||||||
|
|
|
(Loss) |
|
Margin |
|
Items [10] |
(Loss) |
|
Margin |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
APPLIANCES AND COOKWARE |
|
291 |
|
(308 |
) |
|
(105.8 |
)% |
301 |
|
(7 |
) |
|
(2.4 |
)% |
|||||||
COMMERCIAL SOLUTIONS |
|
413 |
|
(272 |
) |
|
(65.9 |
)% |
323 |
|
51 |
|
|
12.3 |
% |
|||||||
HOME SOLUTIONS |
|
347 |
|
(291 |
) |
|
(83.9 |
)% |
305 |
|
14 |
|
|
4.0 |
% |
|||||||
LEARNING AND DEVELOPMENT |
|
528 |
|
5 |
|
|
0.9 |
% |
81 |
|
86 |
|
|
16.3 |
% |
|||||||
OUTDOOR AND RECREATION |
|
307 |
|
(474 |
) |
|
(154.4 |
)% |
489 |
|
15 |
|
|
4.9 |
% |
|||||||
CORPORATE |
|
— |
|
(66 |
) |
|
— |
% |
20 |
|
(46 |
) |
|
— |
% |
|||||||
RESTRUCTURING |
|
— |
|
(2 |
) |
|
— |
% |
2 |
|
— |
|
|
— |
% |
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
$ |
1,886 |
|
$ |
(1,408 |
) |
|
(74.7 |
)% |
$ |
1,521 |
|
$ |
113 |
|
|
6.0 |
% |
|||
10. |
Excluded items consist of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200731005128/en/
Investor Contact:
Nancy O’Donnell
SVP, Investor Relations & Corporate Communications
+1 (770) 418-7723
nancy.odonnell@newellco.com
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danielle.clark@newellco.com
Source: